The stock market has roared back to record-high territory -- and the number of U.S. millionaires is not far behind, according to a new report.
The number of U.S. households worth $1 million or more, excluding the value of their homes, surged to nearly 9 million in 2012. That is just below its pre-recession peak of 9.2 million, according to a report by the Spectrem Group, a Chicago-area financial consultant firm.
The economic downturn caused the stock market to tumble by more than half between October 2007 and March 2009, when the Dow Jones industrial average hit a low of 6,443. The fall decimated the nation's ranks of millionaires, which slipped to 6.8 million in 2008 after hitting its peak the previous year, Spectrem said.
But the market is back. The Dow closed Thursday at a record high of 14,539, continuing a long surge that has also lifted hundreds of thousands of American families above the millionaire mark.
Spectrem's latest count, which the firm arrived at by combining Census Bureau data with information developed by private sources, estimates millionaires in the United States at 8.99 million.
"Just as the stock market crash triggered a steep drop in the net worth of wealthy investors, the rebound in equities has made it possible for many affluent households to largely recover," Spectrem president George Walper said.
The firm said the stock-market rally lifted the number of households with $500,000 or more in net worth to 14.3 million in 2012, up half a million from a year earlier.
Meanwhile, the number of what Spectrem calls high-net-worth individuals -- those whose wealth is from $5 million to $25 million -- reached 1.14 million at the end of 2012, up from 1.08 million a year earlier.
The benefits being reaped by those at the top of the wealth ladder from the booming stock market is in sharp contrast to the plight of many Americans. More than 12 million are unemployed, incomes are flat and more than 40 percent of the jobless have been out of work for six months or more.
In a paper released in November, Edward Wolff, a New York University economist, pointed out that stock ownership is highly concentrated among the affluent. In 2010, he found, the wealthiest 1 percent of Americans owned 35 percent of households' stocks, including retirement accounts and mutual funds. The next 9 percent of wealthiest households held 46 percent of stocks.
Others researchers, however, maintain that despite that concentration, average Americans benefit from the "wealth effect" of a rising stock market. When stocks do well, pension funds are more flush and tax revenues rise, they said.
When charitable foundations see gains from their endowments, it allows them to fund more community projects. A bull market also helps college scholarship funds to become more flush and encourages the rich to make more donations.